Setback for India as Nepal signs strategic transit treaty with China

China has agreed to Nepal Prime Minister K P Oli’s request to build a strategic railway link between the two countries through Tibet to reduce land-locked Nepal’s total dependence on India.

This came after the two sides signed 10 agreements including a landmark transit trade deal.

Oli is in China for his maiden seven-day visit. He was given a red carpet welcome by Premier Li Keqiang at the Great Hall of the People. He also called on Chinese President Xi Jinping.

Nepal is seeking to open more supply routes from China amid fears of a repeat of recent nearly six-month long crippling blockade when the Indian- origin Madhesis blocked Nepal’s trade-routes with India, throwing normal life out of gear.

News agency PTI reported that, during the talks, the two Prime Ministers made a comprehensive review of bilateral relations and expressed satisfaction over steadily growing relations between the two countries.

“The two sides exchanged substantive views on further strengthening and consolidating mutual trust and understanding as well as promoting mutually beneficial cooperation in various fields,” according to a press release issued by Nepalese Foreign Ministry.

Trade diversification, cross border connectivity and infrastructure development, cooperation on energy, tourism, finance, education and culture were among the matters that figured prominently during the talks, it said.

During his talks with Li, Oli mooted extension of China’s strategic railway link with Tibet further to Nepal.

Hou said the government would encourage Chinese firms to look at the internal rail plan and that China was already planning to extend the railway from the Tibetan city of Shigatse to Gyirong on the Nepal border.

“Of course, a further extension from Gyirong is an even long-term plan. It’s up to geographic and technical conditions, financing ability. We believe that far in the future the two countries will be connected by rail,” she said.

The two countries sealed 10 agreements including the much- publicised transit trade treaty which will end Nepal’s total dependency on Indian sea ports for third-country trade.

The other agreements included a feasibility study on the establishment of a Free Trade Agreement (FTA), China’s assistance to build a new airport and a border bridge over the Simikot-Hilsa road section that will connect Humla district with Tibet.

The other agreements included a treaty on economic and technical cooperation to build a Regional International Airport Project at Pokhara, Nepal’s famous tourist site.